FYI > 2010 Payroll and Payroll Tax Changes
PAYROLL AND PAYROLL TAX CHANGES
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Effective January 1, 2010
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2010
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2009
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Social Security rate
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6.20%
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6.20%
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Medicare insurance rate
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1.45%
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1.45%
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FICA rate
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7.65%
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7.65%
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Self-employment rate
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15.30%
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15.30%
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Social Security-covered wage base
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$106,800.00
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$102,000.00
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Medicare-covered wage base
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NO LIMIT
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NO LIMIT
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Minimum Wage -
The federal minimum wage increased to $7.25 on July 24, 2009.
As of January 1, 2009 the State of Ohio increased to $7.30 per hour. Thus, the Ohio minimum wage is greater thatn the required federal minimum wage. There are a few exceptions to the minimum wage rules.
IRS Changes Standard Business Mileage Rate to 50 Cents for 2010 -
The standard business mileage rate for transportation expenses paid or incurred beginning January 1, 2010 will be 50 cents per mile, down from the 55 cents per mile in 2009.
In addition, the 2010 standard mileage rate for operating a passenger car for charitable purposes will be at 14 cents per mile. The rate for medical and moving expenses will be 16.5 cents per mile, down from 24 cents per mile rate in effect for 2009.
Electronic Federal Tax Payment System (EFTPS) -
If your Federal tax deposit liabilities exceeded $50,000 you should have been notified by the IRS of your requirement to make various federal tax deposits electronically. If you meet this requirement you should complete and mail the enrollment form 9779.
New Hire Reporting Policy -
All Ohio employers continue to be required to report certain information about employees who are newly hired. If you need additional information please contact us.
The Federal Government has changed the I-9 Form. It has now been released and ALL employers, regardless of size are required to fill one out for each new employee. In addition, all companies will be required to use the new, 2009 Federal W-4 Forms for all employees. You can download the new I-9 at the following website. http://www.uscis.gov/files/form/I-9.pdf . You can go to www.irs.gov to find the new W-4 form.
State Withholding -
If your state withholding liability was $2,000.00 or more for the period 7/1/08 - 6/30/09, you are required to make monthly payments starting in January, 2009. The monthly payment is due no later than 10 banking days following the last day of the month.
The Department of Taxation withholding tables for use by employees are available on their Web site at tax.ohio.gov. Normally more frequently used tables are included with the employee withholding tax returns that have been mailed to employers in December.
School District Withholding –
Ohio Bureau of Employment -
The base wage limit will continue to be $9,000 for 2010.
Ohio Bureau of Worker's Compensation -
The officer's maximum average reportable wage will be $1,151 per week for 2009 and $1,163 for 2010. If you have not applied for Group Rating Worker's Compensation please contact us for potential savings in premiums. In addition, you should have received a notification letter from BWC on your new rates.
Increased Self-Employeds' Health Insurance Deduction
For 2009 and 2010, the self employed health insurance deduction is 100%. Qualifying premiums also include coverage for qualified long-term care. Health savings accounts are an option to consider for individuals with high deductible medical insurance.
Increase Section 179 Expensing
If a business already has reached its expensing deduction limit of $250,000 for 2009, it might postpone placing other qualifying property into service until 2010. In order to deduct qualifying property under the Code Sec. 179 expensing deduction, the taxpayer must own the property and it must be placed in service in the tax year in which the deduction is claimed. For tax years beginning 2010 the expensing deduction is scheduled to decrease to $134,000.
Research and Development Tax Credit
Due to recent IRS interpretations through case law, regulations and rulings, R&D tax credits may now be applied to a broader range of industries and activities than in the past. Companies with traditional R&D or engineering departments often qualify for tax benefits in other departments – areas in which they were unaware of opportunities. Consequently, many companies miss out on qualified R& D expenditures in manufacturing, engineering, quality assurance, purchasing, information technology and other areas.
Thus, the ability to claim tax credits for R&D presents a valuable opportunity for you to recoup a significant part of your costs incurred in developing your innovative products and services. Fully capitalizing on these credits requires the ability to identify the full and broad range of qualified R&D activities company-wide, a process for annually capturing relevant R&D – related information, and a clear understanding of IRS regulations to ensure such claims can stand up to scrutiny. If you believe you may have R&D expenditures, please contact us.
Sales Tax Electronic Filing -
All vendors - regardless of sales volume - are required to file electronically rather than on paper.
For business owners, electronic filing cuts down on paperwork and postage costs. For state government, each electronic return saves a dollar or two in processing costs - and if you think about it, the taxpayer dollars saved are really yours.
The Ohio Department of Taxation now offers three ways to file a sales tax return electronically. See below for the option that best suits the needs of your business.
The Ohio Business Gateway is a one-stop for common state government transactions including the filing of sales tax returns. The Business Gateway empowers business owners by permitting electronic check and credit card transactions to be post dated until payment is actually due. And to make the filing of sales tax returns more efficient for businesses and practitioners, the Ohio Business Gateway is adding new file upload and full UST-1 filing capabilities that will cut down or eliminate on-line data entry.
The next generation of sales and use tax forms is eForms. Through the Department of Taxation’s innovative eForms technology, business operators can complete Adobe Acrobat versions of Ohio’s universal sales and use tax forms, much as they would on paper. By using eForms, taxpayers have the option of making payment by credit card, electronic check, or paper check.
A tried and true method of electronic filing is by touch-tone telephone. If you are a small business owner with a regular(single) county vendor’s license, Ohio’s TeleFile system may be for you. TeleFile users may remit a payment by credit card or electronic check. To access the sales tax Telefile system, call (800) 697-0440.
